Forex Supply and Demand: Little story - ForeXposed

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Wednesday, February 22, 2017

Forex Supply and Demand: Little story

Once upon a time, long time ago, there was a village at the foot of the mountain stricken by a flood. While the villagers are sleeping, slowly, the water began to flooding the village. After the villagers know the flood comes, they haste to fled on the safer areas.

Almost all villagers evacuate, except one old man who chose to stay. This man then prays to God: "My Lord, you are mighty, you are the supreme helper and most forgiving. I ask for your help, o my God. I have forgiven the people who hurt me, so this time I want to beg your mercy, and please help me. "

As the water began rising, the old man climbs to the roof of the House. Shortly thereafter, it comes men with small boat intends to help this old man. However, the old man is refusing that person. Before long, the rescue boat from SAR team also came, again, the old man rejected it.

In the end, comes a helicopter to rescue him, nonetheless, this old man still rejected it, because he was very sure the Lord will come to help her. Further, the water was swamp and shortly the old is sinking and die.

In the afterlife, this old man met the Lord, and he asks: "O my Lord, I pray that you save me, but why did you not answer my request?"

The Lord answered: "I have heard your prayer, I have sent people in canoes to help you, but you ignore it. Again, I send to you a larger of forces by SAR boat, as it may be you like to be more secure, again thou ignore it. Then, I send a helicopter as it may be you are afraid of the boat, alas, you still ignore it. Not that I do not help you, but you are not helping yourself ."

Well, I want to ask, what is the correlation of the story with a daily trading activity? Could you describe it with only one word?
Forex Supply and Demand: Little story


The answer in the one word is ‘HOPE’. In addition to the FEAR’ and ‘GREED’, Hope can be your worst enemy in the trading, your worst enemy, your worst nightmare.
This forex trading industry shades with ‘hope’, it is also the ‘hope’ that envelop the subconscious mind most of the traders. The first time you became acquainted with forex (spot) market, you have been bombarded with a plenty of hope.

The service provider (broker/analyst/commentator, etc) really capitalizing this ‘hope’ with a variety of marketing propaganda, for the benefit of their business. The most ridiculous thing often we hear is statements that forex is a fast track towards the wealth.

Do not believe the hype ... Just don't!! This is an illusion which is totally groundless. Quite the contrary, forex trading is a field of slaughter, especially for novice retailer traders, this is the reality. On the surface, forex trading looks cool. But underneath, the massacre took place. Left only the account numbers, do not follow their footsteps. The perpetrators of this industry will never talk about this, they have business interests, and it's natural. What often arises is marketing propaganda, "Imagine this ... Imagine that. "

A ‘hope’ as this (the illusion) that ultimately affect the trading activity. I give two practical examples:

  1. How you are when at unfavorable position (adverse position), the word 'hope' is the main word that always comes up, "may the price reverses direction" or "sure, the price will return again later " and so on.

  2. Doubts often arise when taking decisions because of the expectations. Often we hear, some traders say, "If the price goes down little more, I'll take buy position." And then the price drops a bit, he then spoke up, "Soon, wait down deeper." Until the end, he never doing an entry, because prices have been turning direction and leave him, waiting and waiting .....
Dude, we trade based on the set of objective rule, not based on hope. Do not destroy your daily trading with too much hope. Okay, you have hopes, but when you are trading, the decisions you make must be clear and there are parameters. You must take an entry position objectively, as well as on the placement of stop loss or profit margin.

Therefore, have and make a good trading plan, at least, this can eliminate emotional factors that often influence our trading. My advice, prepare the trade plan before the trading activity is running, do not create planning when trading is underway. I think, in the morning is a good time for us to make the plan work, because the mind is still clear.

In the evening, you can review your entire trading activity, whether already according to plan or his plan thus trade that should be revised. In this way, little by little, you will be accustomed to trading mechanically, is not unfazed by things that interrupting the decision-making process.